Paramount Media Networks is proceeding with the closure of MTV News to reduce expenditure and headcount.
A memo by Chris McCarthy, the head of Paramount Media Networks, revealed to CBS News that approximately 25% of employees from Showtime, MTV Entertainment Studios, and Paramount Media Networks would be laid off. This move forms part of the parent company, Paramount Global’s restructuring plan for its cable and entertainment TV division. (Paramount Global also owns CBS News.)
“We have made the necessary, though difficult, decision to downsize our domestic team by about 25%,” McCarthy wrote in the email, describing the action as a “critical strategic realignment of our group.”
This follows layoffs in February at Showtime, which, as reported by Deadline, were part of a broader effort to integrate the cable network into Paramount+, the company’s streaming service.
In his memo, McCarthy also underlined the success of Paramount+ with its “stellar track record of hits including Yellowstone, 1883, Tulsa King, South Park, The Challenge, Teen Wolf, 1923, Drag Race, Mayor of Kingstown, Your Honor, George & Tammy and Yellowjackets.” These shows have propelled Paramount+ to the industry’s forefront regarding new subscriber growth.
Paramount Media Networks, formerly MTV Networks, runs TV channels including CMT, Comedy Central, MTV, Nickelodeon, and TV Land.
Media Sector Challenges
MTV News, which became a cultural icon after its launch in 1985, has significantly downsized. Its closure comes amidst increasing pressure on the media industry as it transitions from traditional TV networks to streaming platforms and digital news publishers fight to stay viable.
BuzzFeed announced in April its decision to close its Pulitzer Prize-winning news division. Vice News, a competitor to BuzzFeed in the online news sphere throughout the 2010s, is also facing difficulties, with reports of impending bankruptcy from the New York Times and the New York Post.
Like many large media corporations, Paramount struggles to navigate through an economic downturn that has dramatically impacted advertising and the continued high expenditure on streaming content. The company declared a loss of $1.1 billion in the first quarter, a stark contrast to a $433 million profit in the corresponding period of the previous year. To conserve cash, Paramount also decided to reduce its dividend.
Paramount shares have fallen by roughly 3% this year.
“Given the fundamental challenges that Paramount is facing, the need to preserve as much cash as possible has led to the decision to cut the dividend, thus saving around $500 million annually,” MoffettNathanson analysts noted in a recent research report.
Chris McCarthy’s full memo follows:
Team,
As we complete the integration of SHOWTIME and continue to adapt our business for the future, we have laid a strong groundwork for ongoing success by merging our group into two functions:
· Studios – merging SHOWTIME and MTV Entertainment Studios into a unified studio team
· Networks – consolidating nine distinct teams into a single portfolio group
This amalgamation has resulted in a stellar track record of hits like Yellowstone, 1883, Tulsa King, South Park, The Challenge, Teen Wolf, 1923, Drag Race, Mayor of Kingstown, Your Honor, George & Tammy and Yellowjackets. Combined, these shows have driven record subscriber numbers for Paramount+ and Showtime and propelled Paramount+ to lead the industry in new subscriber growth.
However, despite our streaming success, we face economic headwinds like many of our peers. To address this, our senior leadership and HR have collaborated over the past few months to devise the best organizational structure for our business’s present and future needs.
This has led us to decrease our domestic team by approximately 25%. This is a necessary yet painful strategic realignment of our group. By discontinuing some departments and streamlining others, we aim to reduce costs and create a more efficient approach to our business as we navigate. Today, employees whose roles are being affected will be informed, with leaders directly communicating the news to those teams or individuals. Individual discussions with our HR partners will succeed in these meetings.
I understand these decisions will be hard for everyone, most of all for those departing. We don’t take this lightly. Our team members, who passionately and dedicatedly contribute to advancing our brands and business, make it particularly hard to bid farewell to our colleagues and friends. To those affected, we deeply value the passion and creativity you have brought each day. Thank you for your many contributions.
Our leadership team and HR partners are committed to conducting this process with empathy and respect.
Sincerely,
Chris
The closure of MTV News and the layoffs at Paramount Media Networks signal the ongoing struggle of traditional media companies to adapt to the rapidly changing landscape dominated by digital and streaming platforms. The focus now for Paramount is on its streaming service, Paramount+, which has seen considerable success with various popular shows. Despite the immediate challenges, the company remains hopeful that its strategic realignment will pave the way to a more sustainable and profitable future.
